Will the UK’s central bank cut rates a second time?

The Bank of England meets on 19th September. Those holding mortgages and savings accounts will be watching closely, albeit hoping for different outcomes. Will the UK’s central bank follow the European Central Bank and cut rates a second time?

The smart money – in the form of a group of economists surveyed by Reuters – says that the Bank is likely to keep rates on hold this month, but cut in November and possibly in December[1].

This is not surprising. At the last meeting, the Bank of England governor said he would proceed with caution. While inflation has come right down, the reading of 2.2% in July [2] was a smidge higher than the previous month, and higher energy bills may start to weigh on the figures.

Either way, lower rates are likely to come this month or next, with implications for your finances. How can you prepare?

It’s bad for cash

It didn’t take long for high street banks to drop the rates on their savings accounts in response to the interest rate cut in August. In a matter of days, cash savers had received the now-familiar note saying that the interest rate on their savings would fall. Savers should expect the same again this time around.